Shares of Sunrise Senior Living Inc tumbled after the operator of managed-care facilities reported a third-quarter loss and said it was in restructuring talks with lenders.

Its shares were down 29 percent in late afternoon trade on the New York Stock Exchange, making them the NYSE's top percentage loser.

Sunrise, which said earlier this year that it might have to reorganize under bankruptcy protection if it could not reach agreements with lenders to restructure debt, said it was working to extend debt maturity dates, refinance debt and get waivers from lenders.

The company is also in talks with possible venture partners or third parties to sell assets to boost its liquidity, it said.

As of Sept. 30, the company had $624.6 million of debt outstanding, of which $411.9 million was in default and another $192.8 million was due within one year, company executives said in a conference call on Monday.

The senior living sector, has been under pressure amid the U.S. housing market decline and recession this year, as elderly homeowners have been hesitant to sell their most important asset to move into managed care facilities.

The company reported a narrower third-quarter loss amid a drop in occupancy at its facilities, and said it may see increases in repairs, maintenance and utilities expenses toward the end of the year.

During the quarter, while we saw a leveling off of occupancy, we were hoping for a clear gain, Chief Executive, Mark Ordan said in the conference call.

During this period, we were trying to meet the needs of prospective residents by providing incentives to move into a Sunrise community. But again, this helps stem the decline, but not reverse it.

Sunrise posted a third-quarter loss of $44.4 million, or 88 cents a share, compared with a loss of $69.7 million, or $1.36 a share, a year earlier.

Sunrise said it also expects to eliminate 49 positions by early 2010 after already cutting 114 positions under its 2009 restructuring plan and 165 positions under its 2008 plan.

The company said earlier this month that it reached a debt restructuring deal with two lenders to seven of its nine German living communities. But the company is still working with lenders on $238 million of debt in default as well as $1.4 billion of joint venture debt that is also in default.

Sunrise is also trying to sell its German communities.

In the next few weeks, the company is hoping to close a $204 million deal for the sale of 21 properties to rival Brookdale Senior Living Inc. The deal, which was announced earlier this month, will enable it to make a $25 million payment to lenders that would extend its line of credit through December 2010 and cure other defaults.

In afternoon trading on the New York Stock Exchange, Sunrise shares were down $1.26 percent at $3.05. They traded as low as 27 cents in late November 2008.

(Reporting by Emily Chasan)